How Can I Protect My Credit Score in a NJ Divorce?

For many, the idea of filing for a divorce is something that can be emotionally devastating. However, it’s important to consider the legal and financial implications of these matters. Though you may be heartbroken now about this decision, you may be even more devastated later when your financial future takes a toll. Unfortunately, one thing many fail to consider is the impact a divorce can have on their credit score. As such, taking steps to protect yourself by working with a Morris County divorce lawyer is in your best interest during these complicated matters. The following blog explores how filing for a divorce can affect your credit and what you can do to protect yourself.

Will Filing for a Divorce Impact My Credit Score?

It’s imperative to understand that filing for divorce in and of itself will not have an impact on your credit score. In fact, your decision to divorce will not even be reflected on your credit report.

However, it is imperative to understand that a divorce can have indirect impacts on your credit score and financial future. When you divorce, your assets will be divided among you and your spouse, either based on your own ability to work together or on the court’s decision. In addition to your assets, your debts will also be divided. As such, you may each be responsible for making payments on certain accounts. If these accounts are in both of your names, and your spouse fails to make an on-time payment, it can negatively reflect on your credit score. In fact, if your ex continually fails to make payments, you can be sued, even if your divorce agreement states that your ex-spouse is responsible for making the payments.

Additionally, closing joint accounts and opening new ones can have an impact on your credit utilization, which could negatively impact your credit score. However, these are often minor changes and can be turned around relatively quickly.

What Can I Do to Protect Myself?

If you are going through a divorce, taking the necessary steps to protect yourself and your financial future is critical. Generally, one of the most important things you can do to help protect yourself during a divorce is to begin closing any joint accounts. You may need to pay them off first, but doing so can help separate your debts, making it less likely that you will be held liable for your spouse’s actions. This includes removing yourself as an authorized user on their credit card and vice versa.

You may also be able to refinance larger debts solely into the name of the spouse responsible for making the payments, but this can be challenging and will depend on the cooperation of the lender.

It is imperative to stress that protecting your financial future does not include choosing to conceal assets or hide property to receive a more favorable outcome during your divorce. Doing so is illegal and can result in legal action being taken against you.

As you can see, there are a number of important considerations that must be made when you begin the divorce process. At Haber Silver Russoniello & Dunn, we understand how difficult these matters can be, which is why we will do everything in our power to help you recover the compensation you deserve. Connect with our firm today to learn how we can fight for you during these times.